On Monday 30 September, Oxera hosted a roundtable discussion on the future of digital regulation. This event took place in the context of heightened focus on the wider impact that ‘Big Technology’ is having on society, with issues in digital markets posing many new challenges for regulators.
A range of new commercial tools and approaches are being introduced, such as data-driven personalisation of prices and product offerings, as well as zero-priced service offers that monetise user data for revenue. At the same time, established business models—such as advertising-funded free content and the matching of buyers and sellers for a commission—are being deployed on a scale that has never seen before.
Although these technologies undoubtedly offer a wide range of benefits to consumers, businesses and society, they also bring new concerns. Principal among those is the risk that network effects and scale economies—inherent to digital business models—result in the consolidation of market power and reduced contestability for digital markets.
Questions are also being asked about whether the ‘price’ paid by consumers in terms of foregone privacy is too high, while competition authorities around the world are examining whether digital players are squeezing out competitors. At the same time, content producers fear that the platforms they rely on to reach their audiences will keep an excessive share of the value created. Those platforms, meanwhile, are facing ever tougher calls to monitor the material being distributed over their services in order to prevent harmful content reaching vulnerable consumers.
Against this backdrop, the UK government commissioned the Digital Competition Expert Panel—led by Professor Jason Furman—to consider whether policy and regulatory changes are needed to ensure that society can continue to benefit from vibrant digital markets. In March 2019, the Panel published its final recommendations in the ‘Furman Review’, which centred around the creation of a new ‘digital markets unit’ to implement and oversee a code of conduct for digital platform operators. The Furman Review calls on this new unit to take a more participatory approach to regulation—engaging with industry to develop sustainable solutions to the issues faced.
Our roundtable event aimed to contribute to this participatory approach. We brought together 40 participants, including representatives from government, regulators, industry and advisors, and asked them to share their perspectives.
Oxera Partner Felipe Flórez Duncan acted as chair, and key contributors included Professor Amelia Fletcher from the University of East Anglia, who was a member of the Digital Competition Expert Panel and co-author of the Furman Review, and senior representatives from BEIS, Google, Facebook, Microsoft, the European Commission, the CMA, Ofcom, Which?, and the Information Commissioner’s Office among others.
The briefing paper prepared for this event can be downloaded here.